C-57/86
ECLI:EU:C:1988:104
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OPINION OF SIR GORDON SLYNN —CASE 57/86
OPINION OF ADVOCATE GENERAL SIR GORDON SLYNN delivered on 1 March 1988
My Lords, whether or not they exported the processed products.
The Hellenic Republic seeks the annulment A rate of 10.5% for loans for pre-financing of Commission Decision 86/187/EEC and financing of exports, applicable before (Official Journal 1986, L 136, p. 61: the April 1983 under a system which was in 'Decision') which held that an interest force at the time of Greece's accession to rebate system for exports of all goods the Communities, was abolished. To offset except petroleum products adopted in the resulting disadvantage for exporters, Greece (which had not been notified to the interest rebates of 6 % ( 3 % in the case of Commission under Article 93 (3) of the loans granted at 14%) were granted to EEC Treaty) constituted State aid incom exporters of all products other than patible with the common market. petroleum products provided that sale proceeds were rapidly repatriated and converted into drachmas.
Its interim request for suspension of the Decision was rejected by Order of the The operative part of the Decision is President of the Court of 30 April 1986. confined to declaring the scheme's incom patibility with the common market under Article 92 (1), though the Commission stated in the last recital of the Decision that the Decision did not prejudice 'any conclusions which the Commission may draw as regards the recovery of the said Under the scheme as described in the aids from beneficiaries and as regards the Decision and in the President's order, with financing of the common agricultural policy effect from April 1983 commercial interest by the European Agricultural Guidance and rates (which in Greece are fixed by the Guarantee Fund'. Article 1 provides that Bank of Greece) were revised to the 'the aid in the form of an interest rebate of following levels: 21.5% for loans to 6 or 3 % which, subject to certain industry, 18.5% for loans to processors of conditions, the Greek authorities grant 'to agricultural products and 14% for so-called exporters of agricultural products listed in craft undertakings. It appeared at the Annex II to the Treaty, with respect to hearing, contrary to what was thought to be which Articles 92 to 94 of the Treaty have the position at the time of the President's been made fully applicable by virtue of order, that the 18.5% rate applied to all Articles 42 and 43 of the Treaty, and to undertakings processing agricultural goods exporters of all other products not listed in
GREECE v COMMISSION
Annex II with the exception of petroleum scheme under Article 93 (1) and never products, is incompatible with the common declared it incompatible with the common market under the terms of Article 92 of the market, it cannot now declare the revised Treaty and must be abolished'. scheme incompatible since it has the same effect and indeed, in the case of loans for periods over six months, is less advant ageous for exporters.
Article 2 provides that 'Greece shall inform the Commission, within one month of receiving notification of this Decision, of the measures which it has taken in order to comply therewith'. The measures taken by the Greek authorities subsequent to the Although the Commission gives different Decision are the subject of the proceedings reasons for the fact that it did not examine in Case 63/87 Commission v Greece. the previous system, it validly observes that the revised scheme can be assessed indepen dently of the old scheme. If the new scheme favours certain undertakings or the production of certain goods, and satisfies the other conditions of Article 92 (1), it is Greece raises three principal arguments an aid scheme and should have been which do not differentiate between the notified under Article 93 (3), either as a categories of exports involved. They are new aid or as an alteration of an existing respectively that the rebate scheme does not aid. It is irrelevant whether it is more or less constitute 'State aid' within the meaning of favourable than the system which it Article 92 (1) (and therefore did not have supersedes and whether or not that system to be notified under Article 93), that the was an aid scheme and, if so, compatible rebate was not financed 'through State with the common market. resources', and lastly that the Commission has not proved that the scheme affected trade between Member States.
It is clear that under the scheme the interest Two points are made to support the first rates applying generally to commercial argument, namely that the rebate scheme operations within Greece are lowered only was intended to operate neutrally vis-à-vis in the case of loans for the financing of the system in force before April 1983 (that certain exports. Export undertakings thus is, it merely cancelled out the adverse effects receive an evident advantage over domestic of the increased rate on exporters and did sellers and over certain other exporters by not confer an additional advantage on what the Commission treated as an export them) and was in any case a measure of subsidy applying to intra-Community trade. monetary policy, not a subsidy scheme. The Commission's conclusion to this effect is supported by the judgment in Joined Cases 6 and 11 / 69 Commission v France [1969] ECR 523 in which the Court held that a preferential rediscount rate for The applicant argues that, since the exports constituted aid within Article Commission did not investigate the previous 92 (1).
OPINION OF SIR GORDON SLYNN — CASE 57/86
That case is also relevant for the second the preferential rate to be an aid within limb of Greece's first argument, that the Article 92. scheme is a measure of monetary policy. The applicant contends that the scheme was devised to improve the country's balance of payments by encouraging exporters to repa triate the proceeds of their sales and convert them into drachmas rather than holding Likewise here, whatever the reasons which foreign currencies in order particularly to led the Greek authorities to adopt the benefit from falls in the exchange rate of the interest rebate scheme, it clearly favours drachma. It was not, it is said, devised to exporters and therefore falls within Article benefit exporters as such. 92, if the other conditions of that Article are satisfied, the subject of the second and third grounds of attack. I would therefore reject the first argument.
The Commission doubts whether the previous system encouraged such practices The second argument is that the rebate is and whether the new system is effective to not granted out of State resources. Two provide a remedy. It also observes that apparently contradictory assertions are measures such as penalties which do not made, the first that the commercial banks have a protective effect could be used to pay the rebate out of their own resources achieve the same end. (return on term deposits of their own funds), the second that in effect they are only returning to the exporters what is already theirs. In paragraph 11 of his order on the interim application, the President noted that 'it became clear at the hearing that the interest rebates accorded to their Be that as it may, it is clear law that, despite exporting customers by the commercial Member States' relative freedom in the banks which granted the loans did not come monetary sphere, measures taken therein from those banks' own resources, ... the may fall within the scope of Article 92. As banks were reimbursed by the Bank of the Court said, dismissing the French Greece'. For that reason he held that 'it argument to the contrary in the preferential appears difficult to conclude, at this stage, rediscount case, Articles 108 (3) and that those funds do not come from State 109 (3) 'confer power of authorization or resources'. intervention on the Community institutions which would be otiose if the Member States were free, on the pretext that their action related only to monetary policy, unilaterally to derogate from their Treaty obligations without control by the Community Nothing has emerged following the institutions'; the principle of solidarity President's order, either in the written contained in Article 5 finds expression in proceedings or at the hearing of the main Article 108 and 'the exercise of reserved application, to lead the Court to take a powers cannot therefore permit the different view. In particular, Greece has not unilateral adoption of measures prohibited sought to deny that the lending banks are by the Treaty'. The Court therefore found reimbursed by the central bank.
GREECE v COMMISSION
Moreover, as the Commission observes, the The applicant argues that the Commission Bank of Greece is authorized by statute to must rely on actual figures to show that implement the Government's monetary Greek exports increased as a result of the policy and the governor of the Bank is aid whereas the Decision is confined to appointed by the Government and over half assertion. In fact, particularly in the cereal of the commercial banks are in effect sector, Greek exports have lost ground. managed by or for the account of the State, none of which contentions was challenged by the Greek Government.
The Commission, however, starts from the position that, as the Court held in Case 730/79 Philip Morris Holland v Commission Finally, 'as is clear from the actual wording [1980] ECR 2671, at pp. 2688 and 2689, of Article 92 (1), aid need not necessarily 'when State financial aid strengthens the be financed from State resources to be position of an undertaking compared with classified as State aid' as the Court held in other undertakings competing in intra- Case 290/83 Commission v France [1985] Community trade, the latter must be ECR 439, at p. 449. In that judgment, the regarded as affected by that aid'. The Court also referred to Case 78/76 Steinike presumption of effect on intra-Community und Weinlig vGermany [1977] ECR 595, in trade is also to be found in Joined Cases which it was held that there was no 296 and 318/82 Netherlands and Leeuwarder distinction between 'aid . . . granted directly Papierwarenfabriek BV vCommission [1985] by the State or by public or private bodies ECR 809, in which the Court recognized established or appointed by it to administer that 'in certain cases the very circumstances the aid' (at p. 614). These cases were in which the aid is granted are sufficient to confirmed in Joined Cases 67, 68 and 70/85 show that the aid is capable of affecting Kwekerij Gebroeders Van Der Kooy BV and trade between Member States and of Others v Commission, judgment of 2 distorting or threatening to distort compe February 1988, ECR 219. tition' (at p. 824). The word 'capable' serves as a reminder that Article 92 deals with potential as well as actual effects.
It is enough to satisfy Article 92, as I see it, that aid is paid at the State's behest or by order of a body empowered to that effect by In Part V of the Decision it is said: the State, as is the Bank of Greece, even if it is not financed directly through State resources, as this scheme almost certainly was. The second ground therefore fails. 'The interest rebates (6 or 3%) introduced after 1983 by Greece for exports of products other than petroleum products artificially serve to facilitate their sale on The third argument is that, in the Decision, Community and non-Community markets the Commission has not proved the since they result in an appreciable reduction existence of an effect on inter-State trade in the costs incurred in selling them on and competition. foreign markets.
OPINION OF SIR GORDON SLYNN —CASE 57/86
It is to be borne in mind firstly that Greek affected, which deduction is expressed in products constitute an enormous trade flow such a way in the Decision as to comply (in 1982, 46.3% of the total value of Greek with Article 190 of the Treaty. The third exports of ECU 4 381 million was argument is accordingly not made out to my accounted for by sales to other Member satisfaction. States; in 1984 the value of exports reached 13.6% of the gross domestic product) and Finally, at the hearing, the applicant secondly that exports are the subject of stiff contended that the Commission was competition between Greek undertakings estopped from arguing that the - rebate and those of the other Member States. scheme affected intra-Community trade because, in the context of the clearance of Furthermore, by facilitating the creation of EAGGF accounts, the Commission had new commercial outlets, or at least the declared the aid arising from the scheme to maintenance of existing ones, this measure be de minimis and had not charged it to (the impact of which is directly linked to the Greece. As the Commission observes, this is volume of exports) serves to encourage a new argument and therefore inadmissible. Greek producers to increase the quantities I should dispose of it on that basis. produced which, thanks partly to economies of scale, will firstly reduce their production However, even if the facts are correct, it costs and secondly, as a consequence of that does not detract from the finding in the reduction, increase their competitiveness on Decision that the rebate scheme constitutes all markets.' aid within the meaning of Article 92. It There was plainly material — namely the merely shows that the Commission chose substantial rebate paid to exporters — from not to enforce the Decision, for reasons which the Commission could deduce that which do not arise for consideration in intra-Community trade was or might be these proceedings.
This application should therefore , in my view, be dismissed and Greece should be ordered to pay the Commission's costs, including those of the interim measures proceedings .